Chinese yuan strengthens against dollar

Beijing: The central parity rate of the Chinese currency renminbi, or the yuan, strengthened by seven basis points to 6.3632 against the US dollar on Wednesday, according to the China Foreign Exchange Trading System.

In China’s spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day, Xinhua news agency reported on Wednesday.

The People’s Bank of China reformed the exchange rate formation system on August 11 to better reflect market development in the exchange rate of the Chinese yuan against the US dollar.

The central parity rate of the yuan against the dollar is based on a weighted average of prices offered by market makers before the opening of the market each business day and also refers to the closing rate on the previous day, in conjunction with supply and demand condition and movement of major currencies.